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Structural Change and the Kaldor Facts of Economic Growth

  • Foellmi, Reto
  • Zweimüller, Josef

We present a model in which two of the most important features of the long-run growth process are reconciled: the massive changes in the structure of production and employment; and the Kaldor facts of economic growth. We assume that households expand their consumption along a hierarchy of needs and firms continuously introduce new products. In equilibrium industries with an expanding and those with a declining employment share co-exist, and each such industry goes (or has already gone) through a cycle of take-off, maturity, and stagnation. Nonetheless macroeconomic aggregates grow pari passu at a constant rate.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3300.

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Date of creation: Apr 2002
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Handle: RePEc:cpr:ceprdp:3300
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